‘It’s a big crisis’: Covid staff shortages more disruptive now than at height of Delta

Staff shortages during the current Omicron case surge are proving more disruptive than during the height of the Delta wave, Australia’s businesses warn as they plead for greater access to rapid antigen tests and a unified message from governments.

An unofficial lockdown in Sydney and Melbourne has also hammered consumer confidence and spending as people stay at home rather than risk catching the virus.

“This is an imperfect storm,” Damian Kelly, a spokesman for Business NSW, said. “At a time when businesses were hoping for a bumper summer, it’s been the reverse.”

The secretary of the Australian Council of Trade Unions, Sally McManus, said the situation was worse than in early to mid-2020 when Covid first hit and lockdowns began.

“Back then we did have supply chain issues, but nowhere near, and the reason is because of the number of people who are sick,” she said.

“Never in our history have we had the hole in this number of workers at the same time sick – it’s a big, big crisis economically and obviously personally for everyone affected.”

McManus wrote to Scott Morrison on Monday urging the prime minister to make rapid antigen tests free for all, extend paid pandemic leave that is currently limited to household contacts to all close contacts, upgrade work mask requirements and increase support payments to workers and businesses reeling from the burgeoning economic crisis.

Requirements for workers to isolate amid a widespread surge in new Covid cases and the lack of available testing are forcing companies large and small to limit operations, while the latest consumer confidence data points to a chilling effect of the turmoil on consumer spending.

Virgin Australia reportedly cut its January and February schedule by a quarter while Qantas has so far dodged any major impact other than cancelling some of its Jetstar flights during the first couple of weeks in January with the bulk of passengers rapidly reassigned seats.

Inghams, Australia’s biggest chicken supplier, said staff shortages caused by the Omicron wave were causing shortages at customers that Guardian Australia has confirmed include KFC, which is having difficulty obtaining some types of fresh chicken pieces on the east coast.

Visits to supermarkets reveal meat and some dairy products to be among the most affected if emptying shelves are any guide. Most dairy farms, for instance, can hold only about one or two days’ supply of milk, and have to dispose of the product if they can’t get it out the farm gate, the industry said.

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Alexi Boyd, the chief executive of the Council of Small Business Organisations Australia, said the shortage of workers was savaging the hospitality and retail sectors, including activities ranging from hair salons to live music and other entertainment events.

Conditions were now akin to the depths of the Delta lockdowns in NSW and Victoria last year but without the same aid from governments.

“The key differences, they were state-sanctioned and there was small business support in place or regardless of what the reason was,” Boyd said. “Now many of those support measures no longer exist but we’re essentially in a similar situation in that business cannot function for no fault of their own.”

Boyd said the lack of rapid antigen tests and their costs was only one of the issues that governments should hurry up and fix. Another was a plea to the Morrison government to remove limitations on international students that still keep them from working more than 20 hours a week. “It should be lifted to up to 40 hours a week across the board,” she said.

Also unlike during the Delta wave, communications from governments about what people in business should be doing has broken down.

“There’s a disconnect between the information that’s been given broadly to the community and then how do small business distil that into what’s applicable and practical for their business,” Boyd said. “We’ve lost that.”

McManus said that during previous waves “there was a sense that we’re all in this together”, but the failure of the Morrison government to plan for the reopening of the economy had destroyed this.

“I believe that people feel as though we’re rudderless, like we’ve been left to fend for ourselves,” she said.

“The level of incompetence and negligence is astounding.”

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She said jobseeker payments should be lifted back to the level it was in 2020 when the government paid a $550 a fortnight pandemic supplement and jobkeeper-style payments reintroduced, but with broader coverage that included casuals and visa workers.

“It’s not as if we know that next week it’s getting better,” she said.

“It’s not, it’s going to get worse and it’s going to get worse for weeks and that’s people once again left with nothing.”

ANZ and Roy Morgan released their latest Australian Consumer Confidence survey on Tuesday, which indicated spenders’ optimism was down 2.2% compared to the final assessment last year taken a week before Christmas.

The main drop came for “current economic conditions”, which fell 8.7% to its lowest level since the last week of September 2021 when the Delta lockdown ensnared about half of Australia’s population. “Future economic conditions”, though, gained 2.8%.

David Plank, ANZ’s head of Australian economics, said the drop in sentiment was likely caused by the rapid rise of Omicron cases across Australia. Confidence fell in all the major capitals, with Adelaide faring the worst.

“Over the decade from 2011 to 2020, consumer confidence has risen 2.6% on average in the first survey of January compared to the last prior to Christmas, Plank said. “So this result is even weaker than it seems.

“The good news is that people are still relatively happy about their own financial circumstances,” Plank said. “This potentially sets things up for a rapid rebound once people are more confident about health outcomes.”

Among those tracking consumer – and therefore, voter – confidence closely are federal politicians with an election due by 21 May.

Jim Chalmers, Labor’s shadow treasurer, said: “Just a few weeks ago, Scott Morrison and Josh Frydenberg were talking about the ‘real momentum’ of the recovery but those gains have yet again been squandered.

“The scale of this stuff-up is so big, and the consequences for ordinary Australians so bad, that all options should be up for discussion – but Scott Morrison always goes missing when workers and small businesses need him most,” Chalmers said.

The treasurer, Frydenberg, was approached for comment.


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